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Dear professionals,

I just wanted to know your opinion regarding the following matter: our buyer's bank issued L/C for 100 MT of goods in our favour. We made two shipments: first for 80 MT and later for 20 MT. One insurance document covering 110% the amount of 100 MT has been issued. We presented the document to our bank (beneficiary's bank) for the first shipment of 80 MT goods, but they say that there is discrepancy in the documents (insurance document showing 100 MT goods shipped, transport document 80 MT only). Our company has insured the full amount of L/C goods in advance and can't understand why this is not good to the bank, we will present documents for remaining 20 MT goods much later to the bank.
Is our bank right or not?

If insurance policy is open cover policy then this will not be discrepancy.
Regards

Hi Pal,

IMHO, document is discrepant, if the seller has an open cover, he must ask for an insurance certificate covering the partial shipment.
Other comments appreciated
Ciao

Dear Gart
Both the presenting bank and issuing bank do not and are not obliged to know, based on document alone, that your intention was to cover the entire order. They would only check , if data in document correspond. Not to mention that each presentation is independent of other one in establishing compliance. Also , pls note that even if this presentation would be subsequently accepted you will have a problem for the balance of 20pct of the order for which you will no longer have insurance document as it forwarded on first presentation for the entire goods.
Regards